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Adam Bennett and Colin Brinsden
(Australian Associated Press)
Businesses will be the engine room for Australia’s recovery from the coronavirus recession, with Josh Frydenberg declaring a sustainable recovery requires a strong private sector.
The treasurer is splashing the cash in an effort to get the private sector purring and promote jobs growth.
And business is on board for another big spending budget.
“We are on the right track,” Business Council of Australia chief executive Jennifer Westacott says.
“The budget builds on the significant gains we’ve made to create jobs, get people and businesses back to work, rebuild confidence and fire up economic growth.”
To boost business investment, the Morrison government will extend to June 30, 2023 measures that allow 99 per cent of businesses to write off the full value of assets they purchase.
“So a tradie can buy a new ute, a farmer a new harvester and a manufacturer expand their production line,” the treasurer says.
The extension of the temporary loss carry back and temporary full expensing will provide businesses with $20.7 billion in tax relief over the four-year forward estimates.
Small and family businesses will also be given a helping hand when it comes to debt recovery actions by the tax office.
Mr Frydenberg announced independent umpire the Administrative Appeals Tribunal would “stand between” business and the ATO, taking such disputes out of the courts.
“Small and family businesses are the engine room of our economy,” he said.
“They are at the heart of every local community.
“As they strive to recover, we need the tax system to work for them, not against them.”
The government has also pledged to create a “patent box” for the medical and biotech sectors from July next year – which would slash the rate of tax paid on income from new inventions.
“Under the patent box, income earned from new patents that have been developed in Australia will be taxed at a concessional 17 per cent rate — almost half the rate that applies to large companies,” Mr Frydenberg said.
The patent box may be extended to the clean energy sector.
Tax relief will also be given to small brewers and distillers, with excise refunds of up to $350,000 per year.
The measure will cost $225 million over four years, and is designed to boost Australia’s fledgling craft brewing and distilling industry.
Council of Small Business Australia CEO Peter Strong thought the budget looked good.
“After the last budget there was still fear and uncertainty, this time there’s more certainty about what’s happening, about where the economy’s going,” he told reporters in Canberra.
“The biggest issue we’ve still got is jobs, it’s finding workers for those businesses that are ready to grow.”